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Regardless of the number of executive orders President Trump has issued since January 20, 2025, the implementation of tariffs will have the biggest direct impact on our personal finances. Our cost of living will go up and we may even see a shortage of certain goods as our businesses adjust to manufacturing things here in the US.
Tariffs with China could drive prices of many goods significantly higher within the next 60 to 90 days unless there is a substantial reduction from the current 145% tariff rate. Shipping from China is down more than 50% currently and will continue to decline as the trade war continues.
If tariffs remain at current levels, especially with Mexico, Canada, and China the cost of new vehicles could go up by as much as $3,000 to $10,000 per vehicle, depending on make and model. This will put the average cost well over $50,000. Vehicles assembled in the US will not be immune since many parts and components come from other countries.
Used car prices will remain elevated or even go up. Buying used was once a prudent alternative to buying new to keep monthly payments affordable, but lenders will not finance a used vehicle for as long as a new vehicle. Lenders are financing new vehicles for terms up to 84 months, used vehicles 60 months. Plus, the interest rate on used vehicles is higher than new vehicles.
If you are in need of replacing a vehicle in the next 12 months, now may be a good time to move up your purchase, assuming you can work in to your monthly budget. Many dealers currently have promotions and discounted financing in place to help move inventory.
If you have a need for any size appliance now is a great time to buy. Washers, dryers, refrigerators, stoves, and many smaller appliances are on currently on sale. Selection may become limited as items sell out. When they do, new inventory prices will reflect the impact of tariffs and selection could be extremely limited. Regardless of where an item is assembled many parts come from China, which Trump has targeted with the highest tariffs of all countries.
The longer the tariff on China remains, the longer it will take for products and components to flow back to the United States after a lengthy pause. Assuming these products and components from China cannot be found elsewhere.
Other items specific to China that have become scarce are baby items. The Wall Street Journal estimates that 95% of baby strollers, 75% of infant furniture/cribs and 85% of child safety seats come from China. Inventory is getting extremely limited for all these items at current prices. Prices will get very high once new inventory subject to tariffs hits the market.
Shoes, Christmas decorations, toys, anything made of plastic plus steel and aluminum will cost more because of tariff policy unless reduced or eliminated.
The US does not have currently have the capacity to manufacture any of these items mentioned at a scale adequate to satisfy demand. It could take years (decades) for businesses to build factories to do so, assuming a manufacturer can afford ten’s or 100’s of million dollars to build.
Higher cost for steel and aluminum used for beverage and food containers will drive up the cost of beverages of all types and other canned products. The US produces about 108 billion aluminum beverage cans per year with over 50% of the total aluminum supply coming from Canada.
The United States has had the strongest economy since the end of World War 2. Other countries have looked to the U.S. as the place to develop trade and relationships that benefit both countries. Trump’s tariff policy will isolate the U.S from other countries and will make our cost of living go up.
